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Case 1:04-cv-01544-LMB

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UNITED STATES COURT OF FEDERAL CLAIMS ELLA MAE PHILLIPS COMPANY, Plaintiff, v. UNITED STATES, Defendant. ) ) ) ) ) Docket No.: 04-1544L ) ) ) )

Live Tape

(The following transcript was transcribed from a digital recording provided by the United States Court of Federal Claims to Heritage Reporting Corporation on April 4, 2007.)

Pages: Place: Date:

1 through 119 Washington, D.C. February 16, 2007

HERITAGE REPORTING CORPORATION Official Reporters 1220 L Street, N.W., Suite 600 Washington, D.C. 20005-4018 (202) 628-4888 [email protected]

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order

Case 1:04-cv-01544-LMB

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1 UNITED STATES COURT OF FEDERAL CLAIMS ELLA MAE PHILLIPS COMPANY, Plaintiff, v. UNITED STATES, Defendant. ) ) ) ) Docket No. 04-1544L ) ) ) ) Friday, February 16, 2007 Live Tape

(The following transcript was transcribed from a digital recording provided by the United States Court of Federal Claims to Heritage Reporting Corporation on April 4, 2007.) APPEARANCES: On behalf of Plaintiff: GEORGE M. ALLEN, Esquire On behalf of Defendant: WILLIAM J. SHAPIRO, Esquire United States Department of Justice 601 D Street, N.W., Room 3115A Washington, D.C. 20004 (202) 305-0501

Heritage Reporting Corporation (202) 628-4888

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order

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103 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 judgment. upon points that are sufficient to get us to a ruling on both motions. We have the government's motion for summary I believe that you have more than enough to

see that the government's motion has to be denied. The problem the government has -- the fundamental problem, the fatal flaw -- is that anyone would have to see the trail has a shifting use, and a shifting use -THE COURT: By shifting use do you mean a

use that is outside of the dimensions and the scope of the easement? MR. ALLEN: THE COURT: MR. ALLEN: Right. Okay. We have a unanimity of federal

authority that rejects shifting use as being permissible. We have fundamental property law that

says that when there is a shifting use of an easement there is compensation to the landowner or a right to compensation or the easement can't go forward. goes all the way back to literally antiquity. I have provided the Court with 19th century cases that talk about a footpath being used for horses and then a trespass and there is compensation for the trespassers if they can't use it for horses. Heritage Reporting Corporation (202) 628-4888 It That

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order

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104 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 doesn't destroy the right to use it as a footpath, but it says any time an easement is more burdensome then that is a shifting use which entitles the landowner to compensation. So we have a narrowly drawn easement. have a shifting use to a recreational trail. We

That is

enough of itself to deny the government's motion for summary judgment. Our motion for summary judgment I think poses a somewhat different question and puts Your Honor at a point where up until now other than Judge Williams, the remand Judge in the District of Idaho, no Federal Court has gone before on the 1875 Act, and that is does the 1875 Act permit any other use other than continued use for the rail operation which is authorized as an easement. If we are right about that then I believe that this is the Court, this is the case and this is the time to get all the way on the 1875 Act and to say that where there is a conversion of an 1875 Act to a right-of-way through recreational use contemplating railbanking that then that is something you can do, but you've got a compensation obligation when you do it. Therefore, going forward the issue will be Heritage Reporting Corporation (202) 628-4888

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order

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113 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I don't believe that that historical perspective that Mr. Allen gave supports his position that the 1875 Act should be narrowly construed. There

is a difference, in our opinion, between a use that was actually contemplated, active rail service, and a restriction on possible uses, and I believe that's the center of our argument. THE COURT: MR. SHAPIRO: I'm sorry. Say that again.

There's a difference, Your

Honor, between a use that is actually contemplated, active rail service, and a restriction on the possible uses. We believe the 1875 Act contains no

restrictions except it has to be used for a right-ofway. We believe the current use certainly falls

within that. Finally, Your Honor, there was a great deal of discussion about railbanking and whether railbanking in this situation was a sham or not. be honest, I'm not exactly sure what Plaintiff's position is, whether they continue to pursue that argument or not. We certainly point to the corridor investment study as an example of what the intended use is for this corridor in the future, but that factual background is really almost beside the point Heritage Reporting Corporation (202) 628-4888 To

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order

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114 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because our argument is a legal one. If the Court were to look at the trail route here, which was also the railroad's statement of willingness to assume financial responsibility, which is part of the railroad's petition for exemption -that is Defendant's Exhibit 11 at DOJ-073 -railbanking is legally required in this circumstance. As the trail group stated, in filing this statement they specifically acknowledge that the use of the right-of-way is subject to the user's continuing obligation to meet its responsibilities described above and subject to possible future reconstruction and reactivation of the right-of-way for rail service. That is an obligation that the trail group undertakes as a necessary component of invoking the trail back, so Mr. Allen's argument that railbanking is a sham has no legitimacy because as a legal matter this corridor is relevant, and it is available for future rail service. We believe that certainly is

within the scope of the 1875 Act. With that, Your Honor, unless the Court has additional questions we would rest. THE COURT: Mr. Allen seems not to rely upon His

abandonment of the easement as part of his case. Heritage Reporting Corporation (202) 628-4888

Exhibit 5 to Defendant's Response to Court's January 30, 2007 Order